Kaiser Permanente’s ‘Aggressive’ Legal Campaign May Undermine Rights for HMO Patients, Court Writes
The "aggressive legal opposition" Kaiser Permanente mounted to convince an administrative court judge to rule that the Department of Managed Health Care cannot intervene in most patients' quality of care disputes may "undermine the two pillars of HMO patients' rights" in the state -- "effective state regulation and legal accountability," Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights, writes in a Los Angeles Times opinion piece (Court, Los Angeles Times, 6/10). On May 30, Judge Michael Cohn ruled that the DMHC "overstepped its authority" when the department issued a $1.1 million fine against the HMO for "alleged lapses in patient care." Cohn cited a 1975 law that he ruled "allows HMO regulators to oversee health plan finances but not the quality of medical care that patients receive" and said that Kaiser should receive a $25,000 fine for violations of the state appeals process for HMO patients. DMHC Director Daniel Zingale exercised his power under state law to reject the decision. Kaiser may make a final appeal to the DMHC before the HMO files suit in Superior Court, where Zingale would not have the authority to overturn a decision in the company's favor (California Healthline, 5/31).
Although state law allows HMO patients to recover damages from HMOs in quality of care disputes, Court writes that "there is no public record of any patient using the law," in part as a result of forced arbitration decisions supported by HMOs that have "prevented cases from coming before judges." He adds that arbitration "keeps case law beneficial to patients from developing" and allows HMOs to avoid "accountability." In addition, Kaiser has said that "its patients' quality of care is its doctors' problem, not the HMO's," while the Medical Board of California, which regulates the state's doctors, "says it has no authority to address" quality of care issues at HMOs, Court writes. He adds that Kaiser "now is seeking to turn this crack in the law ... into a gaping loophole." Court concludes that lawmakers "must focus their attention on the efforts by HMOs to weaken the state's patients's bill of rights -- even the sneak attacks" (Los Angeles Times, 6/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.